WAVERLY, MN  An overflowing crowd and a flood of comments characterized the Waverly City Council meeting Tuesday evening, as residents shared their water and sewer charge concerns.

“Why am I being charged so much? Will the rates go down next year? Where is the money going?”

These were a few of the questions people asked, and the council did its best to put each issue to rest.

Currently, Waverly’s water rates are at $10 per 1,000 gallons, with a base rate of $12 per month. Sewer is $12.50 per 1,000 gallons, with a base rate of $10.75 per month.

For sewer, the $10.75 base rate is divided into four parts, including a $6 Waverly base rate, a $5.50 Montrose plant base rate, and a 75-cent Waverly credit on the Montrose plant base. The $12.50 sewer usage fee consists of $8 for Waverly usage and $4 for Montrose plant usage.

This means that if a household uses 5,000 gallons of water, the total water and sewer bill would be $135.25.

Rates are high because expenses exceed revenue, the council explained. In 2009, the combined sewer and water funds had a deficit of $113,000.

Revenue for the water fund totaled $300,400 in 2009, and expenses were at $256,900. In the sewer fund, expenses were $517,300, while revenues came in at $361,100.

Debt is 54 percent of Waverly’s total sewer/water expenses. This debt of $4.6 million was incurred to improve and reline sewer lines north of Highway 12, expand the sewer line on Highway 12 during road construction, build sewer/water lines to allow development south of Highway 12, connect with the Montrose wastewater treatment plant, and build the new water tower.

“We incurred a lot of debt in the last 15 years,” Mayor Ken Antil said, adding that the council is doing everything it can to correct the situation.

“We’re trying to hold down the sewer and water charges, and we’ve been on a no spend,” he said.

Staff has maintained costs of the water and sewer system at level rates for the past three years. Wages and benefit costs are also lower in 2010, due to a retirement and the reassignment of some wage costs to the general fund.

Another unavoidable expense is the gas and electricity costs to operate the system.

“In defense of the council, I believe they’re doing whatever they can,” one resident commented.

Wright County Commissioner Jack Russek agreed.

“They’re doing a heck of a job the last couple years,” Russek said. “You’ve got to give them a lot of credit.”

A few ideas the council has for increasing revenue include aggressively pursuing delinquent accounts, paying the difference from the general fund (which would either raise taxes or result in a decrease in other services), or raising the sewer rate.

Another option would be to charge heavy users more than one flat fee per month. In a presentation prepared by council member Connie Holmes, however, she stated that this would negatively impact Waverly’s businesses and would only bring in a small amount of revenue.

The council recently began splitting up the charges on the bill so that residents could see which part is going to Waverly, and which is going to Montrose. It also decided to do a reading each month, instead of estimating based on previous months’ usages.

For water charges, 64 percent of the payment goes to fund Waverly’s debt service, while 36 percent is for operations and maintenance. For sewer, 48 percent funds Waverly’s debt, 36 percent goes to the Montrose wastewater treatment plant, and 16 percent is for Waverly operations and maintenance.

“When do you expect it to go back to the old rates, or is that just never going to happen?” Waverly resident Rich Hendrickson asked.

“We’re taking a hard look at that,” Antil said, but added that, realistically, there probably won’t be a significant decrease in the near future.

One way residents can save money in the future is by purchasing a second meter, city maintenance worker Jim Woitalla said.

The roughly $375 meter will determine how much water is used for irrigation purposes, and sewer charges will not apply to this water usage.

These savings could add up quickly, Antil said. One resident agreed, stating that he uses about 1,000 gallons each time he waters his lawn.

At the meeting, residents had the opportunity to put their names on a list, in order to request a sewer charge reimbursement for their May bills.

The poor economy is a large part of why Waverly’s water and sewer rates are higher than anticipated, the council said. Sewer and water lines built to support new development were meant to be paid by sewer access charges (SAC) and water access charges (WAC) from new houses.

However, instead of new housing, Waverly has been faced with empty lots and unfinished developments.

Last October, there were 77 vacant houses in Waverly. Now, that number is down to about 30 or 40, Woitalla said, but there are still about 300 empty lots.

If the city starts to experience growth, that will greatly help the water and sewer financial situation.

Russek said he heard that the housing market isn’t expected to turn around until 2014 or later, however.

“You can’t sell anything,” he said. “People with money are hanging on to it, and those without money can’t get it.”